Upon appointment of the arbitrator, a pending Section 9 application shall be treated as one under Section 17.

The petitioners and Respondent No. 1 were partners/designated partners in an LLP under an LLP Agreement dated 11 May 2023.

The petitioners alleged that, while continuing as a partner, Respondent No. 1 established a competing proprietorship, M/s Talentrix Media, without prior intimation, and misused the LLP’s confidential information, digital accounts, goodwill, employees and client relationships.

The LLP Agreement contained an arbitration clause under Clause 108 and provisions concerning LLP assets, independent businesses, accounting for benefits, indemnity, disclosure of information and use of LLP property under Clauses 32, 35, 37, 38, 39 and 41.

The petition was initially filed under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection against misuse of the LLP’s data, accounts, intellectual property, clients and employees.

By an earlier order dated 31 July 2026, the Court had granted limited interim restraints against Respondent No. 1.

On 12 August 2026, the parties consented to waive the contractual and formal procedure for appointment of an arbitrator and agreed to refer the disputes to arbitration.

Whether the disputes arising out of the LLP Agreement should be referred to arbitration and a sole arbitrator appointed by consent of the parties?

Whether the pending Section 9 petition should be treated as an application under Section 17 of the Arbitration and Conciliation Act, 1996, for consideration by the arbitral tribunal?

Whether interim protection concerning the LLP’s confidential information, digital accounts, assets and business interests should be considered by the learned arbitrator?

The Court applied Section 9 of the Arbitration and Conciliation Act, 1996, concerning interim measures by a court, and Sections 11(6), 12(2) and 17 concerning appointment of an arbitrator, disclosure by the arbitrator and interim measures by the arbitral tribunal, respectively.

The Court also relied on Clause 108 of the LLP Agreement, which provided for resolution by conciliation/arbitration of disputes arising between the partners or between a partner and the LLP.

Clauses 32, 35, 37, 38, 39 and 41 collectively required protection of LLP assets and confidential information, permitted independent business only subject to prior intimation and non-use of the LLP’s name, and imposed duties of accounting, disclosure and indemnification.

The Court further recognised that questions concerning arbitrability and jurisdiction could be raised before and decided by the arbitral tribunal.

The Court found that the disputes arose directly from the LLP Agreement and were covered by its arbitration clause.

Since both parties consented to waive the contractual and formal procedure for appointment, the Court considered it appropriate to appoint a sole arbitrator without further delay.

The earlier prima facie finding that Respondent No. 1’s alleged use of LLP data, accounts, assets and client relationships could cause irreparable harm justified transferring the interim-relief application to the arbitral tribunal.

Accordingly, the Court directed that the Section 9 petition be treated as an application under Section 17, leaving the arbitrator to decide the interim application, as well as all claims, counterclaims, objections to arbitrability and jurisdiction, independently and in accordance with law.

She was directed to enter upon the reference within two weeks, furnish the disclosure required under Section 12(2) within one week of entering the reference, and conduct the arbitration under the rules and aegis of the Delhi International Arbitration Centre.

The parties were permitted to raise all objections, including arbitrability and jurisdiction, before the arbitrator.

The pending Section 9 petition was treated as an application under Section 17 and directed to be considered expeditiously by the learned arbitrator.

The petition was accordingly disposed of in these terms.